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TMI Blog2022 (4) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... bsence of a post decisional hearing to the subject of the LOC, is not just, fair and reasonable procedure. It is violative of Art.21 of the Constitution of India - When there is admittedly not even an FIR registered against the petitioner, and there is no question of her being accused of any non-cognizable offence, no LOC could have been issued by respondent No.3 to detain the petitioner. At best, the respondent No.3 could have only given information to respondent No.2 about the arrival/departure of the subject according to the OM dt. 22.02.2021. No exceptional case or any adverse effect on the economic interest of India has been made out either in the original request dt. 28.12.2021 made by respondent No.2 to respondent No.3 or in the reply/affidavits and recourse could not have been taken for a coercive process like issuance of LOC - the quantum of the alleged default by the borrower by itself cannot be the basis for seeking issuance of an extreme process like an LOC for restricting the personal liberty of the petitioner to travel outside the country without something more. The OM itself does not draw any line about the quantum of default by a borrower to a financial instituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan by issuing the demand notice dt. 22.11.2021 to respondent No.5 and its guarantors including the petitioner under Section 13(2) of the SARFAESI Act, 2002 demanding a sum of Rs.121,17,11,148.70. (7) It is stated by petitioner that one of the operational creditors of the respondent No.5 filed on 02.09.2021 an application under Section 9 of the IBC, 2016 before the NCLT, Chandigarh and when the matter had come up on 31.01.2022, counsel for respondent No.5 had informed the NCLT that they are admitting the claim of the said creditor and also sought time to file reply before the next date. (8) Respondent No.5 also filed a petition before the NCLT, Chandigarh under Section 10 of the IBC for initiation of CIRP of respondent No.5 and the said application is said to be under scrutiny before the Registry of the NCLT. (9) According to the petitioner, respondent No.5 through one of its Directors sent a letter on 18.12.2021 offering voluntary and peaceful handover and possession of all mortgaged assets of respondent No.5 to the respondent No.2 and requested the latter to sell them and appropriate the proceeds of the sale to the amount due to the respondent No.2. The events w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the instance of respondent No.2, copies of which were also sent to respondents No.3 4, but still they did not provide the petitioner LOC dt. 28.12.2021 or its copy. (17) Petitioner contends that before respondent No.2 requested for issuance of LOC against her and others, it should have at least informed the petitioner and respondent no.5 of the same and that the action of the respondent Nos. 1,3 and 4 in not furnishing even a copy of the said LOC to her was illegal and arbitrary. (18) The petitioner contends that the scholarship secured by her was for study in a prestigious institution and was once-in-a-lifetime opportunity; that she is one among 130 students selected from 34 countries for the MBA study program and is only 2nd person from media to have been offered 90% scholarship; that the respondent No.2 cannot be permitted to hold her entire future to ransom and deprive her of her right to travel abroad and pursue her education ; and her academic career would be ruined on account of the wrong action of the respondent No.2. (19) Counsel for the petitioner relied upon the decision in Maneka Gandhi vs. Union of India (1978) 1 SCC 248 and contended that a citizen of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e IBC and initiation of proceedings under the SARFAESI Act are admitted. (25) Reliance is placed by respondent No.2 on a stock statement ( Annexure R-2) and certain inspection reports ( Annexure R3) pursuant to an inspection said to have been done from 06.12.2021 to 09.12.2021, and it is alleged that the entire stock of the company was siphoned off and only stock worth Rs.5 to 7 crores was left at the godown. (26) It is alleged that the proceeds of the sale of the stock were not deposited with respondent No.2 and there is an apprehension that the stock was removed to some other place to deceive the respondent No.2; and the said respondent therefore entertains apprehension that respondent No.5 Directors/guarantors have a fraudulent or mala fide intention to misappropriate public money. (27) It is alleged that since the investigations by the Banks or other investigating agencies take lot of time to discover the fraud and the modus operandi of the defaulters in siphoning off and diverting the bank loans and funds, the defaulters attempt to leave the country, and so in 2018, the Government of India had issued a notification empowering the Public Sector Banks to seek issuance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... request of the authorized Originator on whose request the LOC was issued by respondent No.3. (35) It is stated that an Office Memorandum (OM) No.25016/10/2017-Imm (Pt.) dt. 12.10.2018 was issued by the Ministry of Home Affairs authorising the Banks to open LOC against any accused, or as per directions of any criminal court in India, and the LOC dt. 28.12.2021 was issued against the Writ petitioner at the instance of MD CEO, Bank of India, Badra Kurla Complex, Bandra (East), Mumbai. (36) It is stated that the reason behind opening of LOC was that the petitioner was a guarantor for respondent No.5 which had defaulted in repayment of more than Rs.100 crores to respondent No.2. (37) It is stated that the issuance of LOC was by following due procedure at the request of respondent No.2 and the respondent No.3 has no objection to withdraw the LOC issued against the petitioner if respondent No.2 requests or directs for the same. (38) Along with the short Reply , the Additional Solicitor General handed over to us (i) Request of respondent No.2 dt.28.12.2021 of the respondent No.2 through Genral manager and Nodal officer to the Deputy Director, Bureau of Immigration, New Delhi, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Government of India, Ministry of External Affairs on July 6, 1977 stating inter alia that the Government has decided in the interest of the general public not to furnish her a copy of the statement of reasons for the making of the order. The petitioner thereupon approached the Supreme Court under Art.32 of the Constitution of India challenging the action of the Government in impounding her passport and declining to give reasons for doing so. (44) A 7-judge Bench of the Supreme Court in 1978 declared that no person can be deprived of his right to go abroad unless there is a law enabling the State to do so and such law contains fair, reasonable and just procedure. It held: 5. Thus, no person can be deprived of his right to go abroad unless there is a law made by the State prescribing the procedure for so depriving him and the deprivation is effected strictly in accordance with such procedure . It was for this reason, in order to comply with the requirement of Article 21, that Parliament enacted the Passports Act, 1967 for regulating the right to go abroad. It is clear from the provisions of the Passports Act, 1967 that it lays down the circumstances under which a pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing since the rule of audi alteram partem is a flexible rule. (53) Did the respondent 1,3 and 4 follow fair, just and reasonable procedure to deprive the petitioner of her fundamental right to travel abroad? (54) We do not think so. (55) It may be that before issuing the LOC the respondent No.s 1,3 and 4 may not wish to issue a prior notice to the subject of the LOC like the petitioner because there is every possibility that, after receiving such notice, the subject may clandestinely leave the country. (56) But we see no impediment to give a post decisional opportunity to the petitioner by supplying to the subject of LOC, the copy of the LOC, and the reasons for issuing it so that the subject of the LOC can take legal recourse to challenge it. (57) In our opinion, non-supply of a copy of the LOC to the subject of the LOC at the time the subject is stopped at the airport for travel abroad, non-supply of reasons for issuing LOC , and absence of a post decisional hearing to the subject of the LOC, is not just, fair and reasonable procedure. It is violative of Art.21 of the Constitution of India. (58) The Office Memoranda produced by the respondents No.1,3 and 4 for o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n cases where there is non-cognizable offence under the IPC and other penal laws, the LOC subject cannot be detained/arrested or prevented from leaving the country. The originating Authority can only request that they be informed about the arrival/departure of the subject in such cases. (65) When there is admittedly not even an FIR registered against the petitioner, and there is no question of her being accused of any non-cognizable offence, no LOC could have been issued by respondent No.3 to detain the petitioner. At best, the respondent No.3 could have only given information to respondent No.2 about the arrival/departure of the subject according to the OM dt. 22.02.2021. (66) No doubt the OM dt. 22.02.2021 contains a clause stating as under:- In exceptional cases LOCs can be issued even in such cases as may not be covered by the guidelines above whereby departure of a person from India may be declined at the behest of any of the authorities mentioned in Clause B above, if it appears to such authority based on inputs received that the departure of such person is detrimental to the sovereignty or security or integrity of India or that the same is detrimental to the bi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No.2 in para 6 of its reply that petitioner cannot be allowed to travel abroad without joining investigation cannot be countenaned because there is no criminal investigation initiated by respondent No.2 by filing an FIR. (72) As held in Vishambhar Saran (5 supra), it is incumbent upon the issuing authority of the LOC to ascertain at least whether the grounds disclosed in the LOC and/or the request for LOC fall within the four corners of the OM issued in that regard prima facie, though it may not be able to go into the merits/demerits of the allegations made against the subject by the originating authority. (73) It appears that merely for the asking by the respondent No.2, the LOC dt. 28.12.2021 was issued against the petitioner and she was detained by officials of respondent No.3 at the New Delhi Airport on 22.02.2022 when she was about to depart to Dubai. (74) We are of the view that there has been non-application of mind by respondent No.3 while issuing LOC dt. 28.12.2021 against the petitioner, and mechanically it appears to have been issued without there being any material to show that the petitioner would fall in the category of a person against whom an LOC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of Article 14 of the Constitution of India. RELIEF: Accordingly (i) The LOC dt. 28.12.2021 issued by respondents No.1, 3 4 against the petitioner at the instance of respondent No.2 is set aside; (ii) Since the petitioner had suffered not only the loss of reputation but also lost the cost of the ticket bought by her for travelling from India to Dubai on 22.02.2022 as she was prevented from boarding the flight by respondents No.1, 3 4, she is entitled to be compensated by costs of Rs.1 lakh to be paid by respondent No.2- Bank which shall be paid to the petitioner within four weeks from the date of receipt of copy of this order. (iii) Respondents No.1 to 4 shall expunge any remarks/endorsements/entries that might have been entered in the records/Passport of the petitioner with respect to the LOC dt. 28.12.2021 within one week from the date of receipt of copy of this order and they are directed to permit the petitioner to travel abroad to pursue her studies. (c) The respondents No.1, 3 and 4 shall serve copy of the LOC and also reasons for issuing it to the person against whom it is issued as soon as possible after it is issued, and also provide a post decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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